Syngene Intl corrects after Q1 PAT skids 19% to Rs 58 cr

Syngene International fell 1.03% to Rs 418.90 after consolidated net profit dropped 19.4% to Rs 58 crore on 0.2% increase in net sales to Rs 421.60 crore in Q1 June 2020 over Q1 June 2019.

Consolidated profit before tax (PBT) dropped 23.9% to Rs 66.30 crore in Q1 FY21 as against Rs 87.10 crore in Q1 FY20. Current tax expense for the quarter slumped 45% at Rs 8.30 crore during the quarter. The result was announced post trading hours yesterday, 21 July 2020.

Consolidated EBITDA slipped 1% to Rs 140 crore in Q1 FY21 as against Rs 142 crore in Q1 FY20. EBITDA margin remained flat at 32% in Q1 FY21 as well as in Q1 FY20.

Syngene International's first quarter performance was driven by robust performances in discovery services and the dedicated centres. The national lockdown resulted in a temporary suspension of operations in all divisions. Since restarting, the expansion of shift working and other protection measures for employees allowed the divisions to return to near normal levels of operation and get client projects largely back on schedule.

As the COVID-19 pandemic continues to escalate, the pharmaceutical major is actively engaged in various COVID-19 research and diagnostic projects. Its RT-PCR testing facility is supporting hospitals across Bangalore (Karnataka) and has conducted more than 30,000 COVID-19 tests free of charge. It has also indigenously developed an ELISA testing kit that has been outsourced to HiMedia for manufacturing and distribution across the country. In development services, he company is supplying reagents for use in diagnostic kits for COVID-19 testing and has signed a voluntary licensing agreement with Gilead for manufacturing and supply of Remdesivir in India and other markets.

Commenting on the Q1 result, Jonathan Hunt, the managing director (MD) and chief executive officer (CEO) of Syngene International, has said that: "In line with our guidance, Q1 revenue was flat at Rs 437 cr compared to the same quarter last year due to the temporary suspension of operations during the nationwide lockdown. However, the implementation of protective measures allowed all divisions to restart gradually and operate at close to normal levels for the last six weeks of the quarter. Across the company, our teams have worked hard to get projects back on schedule."

"Recent good news was the improved credit rating from CRISIL to AA+ with a stable outlook. This is welcome recognition from the rating agency of the Company's business model, strong client relationships, robust processes and sound risk profile. Overall Q1 performance was as expected and we look forward to returning to growth in 2Q," he added.

Syngene International is engaged in providing contract research and manufacturing services in early-stage drug discovery and development to pharmaceutical and biotechnology companies.

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